what life will look like in america in 2025 if we don't change course. will you recognize the country? what are you going to do about it? nonl is power. tomorrow is a powerful episode. bring your kids. show it. good night, america. >> chris: democrats give themselves a passing grade. republicans beg to dinner. mcdonald's isn't loving obama care. and candidate vowing to get a reporter in an angry confrontation. live from the studio in washington this is "special report." good evening, i'm chris wallace in for bret baier. we begin with changes at the white house. we learn today what we had expected for a while, that president obama's chief of staff rahm emanuel is leaving to run for mayor of chicago. this is a day when democratic congressional leaders came to the white house to pat themselves and the president op the back. as white house correspondent wendell goler reports they also slapped around the

opposition. >> reporter: after a meeting at the white house, democratic congressional leaders declared the past two years a success because republicans didn't produce gridlock. >> that has been their objective in the house and senate. what was the result? they failed. >> reporter: house republican leader john boehner said the 111 congress was not colluding as collapsing. >> instead of tallying up a time flurry of legislative output, observers and constituents ask what went wrong? >> reporter: the democrats' tally had last year's recovery act and this year's regulatory reform. republicans focussed on the failure to continue the tax cuts which has been put off until the lame duck session after the elections. >> even with the clear bipartisan majority and the support of the american people we could not get a single up or down vote.

>> boehner says congress is broken. white house agrees. >> the system up there is really broken. >> reporter: boehner blames more parties but democrats blame boehner. >> he has taken millions from special interest and now boehner wants to talk about reforming congress? that's funny. >> reporter: democrats claim republican attempt to undue the president healthcare initiative and financial regulatory reforms would mean return to bush administration policy to trigger the recession we're climbing out of. republicans say a bigger threat is the debt we're amassing under democratic leadership. >> the current congressional rules are rigged to make it easy to increase spending and next to impossible to cut spending. >> boehner suggests congress has a cut as you go rule for new government programs to basically freeze the size of government. but the white house says the republicans aren't willing to apply the rules to extend the bush administration upper income tax cuts. >> if you read through the pledge, they came up with $16 billion to pay for $17

billion program. you don't have to be a math whiz to figure out that's just rhetoric. >> reporter: republicans note extenting the middle class portion of the bush tax cuts would cost $3 trillion and would be added to the deficit but democrats think it's better spent on the economy. >> chris: apparently rahm emanuel is officially leaving as chief of staff tomorrow. do they plan a big event at the white house? >> late tomorrow morning a big east room celebration and ceremony in which the president will say goodbye to chief of staff rahm emanuel. emanuel deciding to throw his hat in the race for chicago mayor. reporters spent much of the briefing trying to get him to confirm it. including asking gibbs what emanuel's legacy will be. >> i'm not buying in the legacy part of your question. in terms of -- look, i will say this.

rahm has an incredible amount of energy every day. >> he will be replaced on interim basis by a senior advisor and served as the chief of stas in the last four years of the senate. he was part of the group that planned the president's presidential bid. robert gibbs said of rouse his strategic spence played a big part in virtually every decision made in the obama white house. chris? >> chris: and one other quick question, because a lot of people in chicago are asking will president endorse rahm for mayor of chicago? >> probably no question. he believes rahm emanuel would make a great mayor of chicago. but emanuel's chances probably look better from washington than from chicago. he will face a tough race. >> chris: wendell goler on the lawn of the white house. thank you for that.

the world's largest amburger chain is denying a published report it may drop healthcare coverage for some employees because of the new obama care reform law. correspondent molly henneberg looks at what is happening beneath the golden arches. >> mcdonald's says it deserves a break today, or a waiver for part of the healthcare law. the corporation reportedly told regulators barring an exemption the law signed by the president last spring may force it to drop health insurance company for 30,000 hourly workers because according to a memo obtained by the "wall street journal", it would be economically prohibitive for our carrier to continue offering it." come january, the law requires insurance company to spend 80-85% of the premium revenue on patient care rather than expenses or salaries. critics say it won't work for limited plan covering basic doctor visit for hourly workers, often in industry with a lot of turnover and therefore lots of paperwork.

>> you have little or nothing left over for the other administrative cost or profit. >> mcdonald's was quick to respond to the journal's story, saying such reports it plans to drop healthcare coverage are "completely false. speculative. misleading." going on to say that it will continue to have an open dialogue with legislators as well as regulators on the matter. the white house said it takes mcdonald's at its word. the crux of the story was it would be dropped and mcdonald's said it's not true. >> other supporters say it would urge companies to provide better coverage for underinsured hourly workers. >> mcdonald's employees are paying hard-earned money for premiums. there is a good question whether they get value from that or not, because the coverage is so limited. >> but they say companies are hunkering down to adjust to the changes. >> you are giving a blank check to a bump of regulators

to make it up as they go along. >> the department of health and human services intends to address concern of companies like mcdonald's and, "other special circumstances" in forthcoming regulations. chris? >> chris: molly, we'll stay on top of this one. new claims for first-time jobless benefits fell by 16,000 last week. the third drop in the last four weeks. economic growth slowed in the second quarter. commerce department puts the gross domestic product from april to june at 1.8%. it's lower than 3.#% in the first quarter. stocks were down. dow lost. nasdaq was down 8. congress extended a policy allowing homeowners in expensive real estate market to get government-backed mortgages of $730,000. the limit for most of the country is $417,000. rates for 30-year fixed rate mortgages have fallen back

down to 4.32%. that matches the lowest level in decades. homeowners having trouble paying the mortgage may soon see conditions change. but for how long? chief washington correspondent jim angle explains. >> reporter: foreclosures are continuing at a record rate and the latest report shows they account for one in four homes in the u.s. >> we're on pace to set a new report with foreclosure accesstivity. the end of the year, we expect that 3.2 million households will receive foreclosure notice. >> thaw tried to hold back but now additions are picking up. >> we are going to see 1.2 million bank repositions under from under 11 million a year ago. >> it would take until 2013 to work through the bulk, but it may slow down as there is a freeze on new foreclosures. j.p. morgan chase announced it is halting effort to repossess 56,000 homes

reviewing the legal document s requesting evictions. >> it's a technical problem and it has implication for housing market. >> bank employees prepare the legal documents but in 23 states the bank official who signs them must make a pledge to the court. >> the person says i have read the foreclosure documents. i have read the mortgage documents. and i believe that the foreclosure here is justified. >> that was easy in normal times when there was a manageable number of bad mortgages but not now. >> in the jp mortgage case with 18,000 cases a month, literally the people there have been signing their names without bothering to look at anything. >> the banks should have had better procedures but did not. >> just for fun, get 18,000 sheets of paper and sipe your name to each one to see how long it takes you. >> jp morgan chase and others insist the affidavits are otherwise accurate but it's

not alone in this. gmac now allied national halted evictions in 23 states for same reason. they fear other institutions did the same thing opening themselves to court challenges which could stall efforts to digest millions of bad loans. >> this is going to stretch things out more. the financial sector will not put the housing problems behind them for probably another several years. banks will get hammered. of course. the real estate business will get hammered. >> until we work through the bad loans, neither housing nor banks can recover. >> chris: thank you for that. the house committee last week heard from comedian stephen colbert about immigration, today listen to media mogul rupert murdock and michael bloomberg. murdock owns the parent company of this network and bloomberg is mayor of new york and owns his own financial news service. they urged lawmakers to match effort to secure the border with efforts to ensure

employers don't hire people illegally. they're part of a group favoring comprehensive immigration reform. that brings to us the featured text to vote poll. the question for you: what should congress have dealt with before leaving? you can text your answer to 36288. type sr1 for holding ethics hearings. sr2 for spending cuts. sr3 for school nutrition bill. or sr4 for tax cuts. we'll bring you the results at the end of the program. still ahead, new york's gubernatorial race gets personal as a candidate and a reporter go at it. >> i'll take you out, buddy. >> take me out? >> yeah. >> how are you going doto do that? >> watch.

>> chris: we begin america's news headquarters coverage tonight in the state of new york where the concept of bare knuckle campaigning almost became a reality wednesday night. senior correspondent eric shawn reports some of the anger and the increasingly negative campaign for governor has spilled over into the media. >> the new york governor's race. got wild. >> stay away from me. >> you. [bleep] >> the republican candidate, outspoken buffalo businessman paladino and new york state post editor going head-to-head over paladino's allegations that his democratic opponent andrew cuomo had affairs during his former marriage to carrie kennedy cuomo, robert f. kennedy's daughter. paladino accuses the media of ignoring it, while reporting on his 10-year-old daughter born out of his own admitted affair. >> you are a stacking horse.

>> what is the evidence? >> you made the charge. >> i'll take you out, buddy. >> you are going to take me out? >> how are you going to do that? >> watch. >> you're working for cuomo. >> the newspaper is owned by the company that owns this network and he denies doing cuomo's bidding in his coverage. >> the affair story about paladino and cuomo. i had paladino on a radio show i host many times. he was happy to come on. i don't think it's a fair premise. >> the campaign accuses a newspaper of sending a photographer to shoot through the girl's window of their house. the paper says it was not their photographer. in a fox news interview monday, paladino told me, she should be off-limits. >> i have a beautiful daughter. it raised her. she is a sweet child. she shouldn't have to deal with this. c'mon! you know, we're grown-ups. take a shot at me, fine. throw your best shot buddy. i'm not really an intimidatable person.

don't go shooting at my kid. >> he had this warning for cuomo. >> over the weekend he had some of his buddies in the press go out and take after my family. >> you know, all right, andrew. strap in buddy. get ready. it's going to get -- we're going to vet you. we're going to let the people know exactly who you are. >> new york can be a tough town. "post" editor and chief said mr. paladino should not be surprised by the media interest in his families, using t using the plural. andrew cuomo said we have not and will not descend in the gutter with paladino. the people of new york deserve a better dialogue from the candidates and journalists. in new york, i'm eric shawn. fox news. >> chris: now across the map to california, where four house democrats are a major target of the g.o.p. this fall. chief political correspondent carl cameron shows us how the golden state fits in the

battle for control of the house. >> california's economy is a mess. unemployment is up to 14% in worst areas making it worse for nancy pelosi who is from the goldp state. they need 39 to oust her as speaker. they cast her as the wicked witch of the west. california has 53 congressional districts, more than any other state. 33 are democratic, 19 is republican and one is vacant. in orange county, democratic loretta sanchez is vulnerable after a spanish language interview she injected national origin in the call pain. [ speaking spanish ] >> her republican opponent is a vietnamese american. >> 14-year incumbent, sanchez

went for hate politics. and basically appealed to the basis of what is going on right here; that is, to pit two communities against each other. >> in modesto with one of the worst jobless rate in california, cardoza faces a tough challenge from republican farmer berryhill. in the northern california swing district 11, two-term incumbent democrat mcnurney in a close battle with lawyer dave harmer. but the campaign trail could hardly be worse for what is called the valley forgot. here democratic incumbent jim costa faces sky high unemployment and a costly federal water policy and well-organized plain-spoken g.o.p. rancher with tea party support. >> costa and pelosi is bankrupting the country. the state is bankrupt already. as california and the rest of the nation goes, don't follow

california over this cliff. >> here in the central valley like much of the country, the top issue is jobs. that means farm water to turn the land green again. since they're not doing anything to open up the federal pumps, republicans say the only recourse in the short-term is turn democratically controlled blue districts to republican red wins. chris? >> chris: carl cameron reporting from california. thank you for that. is the justice department stonewalling over an alleged bias against white voters? we will take a fair and balanced look. up next, the oil is gone but the doubts remain. look at the seafood slowdown along the gulf of mexico.

>> chris: checking world headlines now, pakistan today

blocked a vital supply route for u.s. and nato forces fighting in afghanistan. it was retaliation for an alleged cross-border helicopter strike that killed three pakistani soldiers. pakistani army statements says its troops fired warning shots at the coalition choppers that fired two missiles. nato is investigating. iran says it will begin loading the russian-built nuclear reactor with enriched uranium fuel in early october but that's months later than originally announced. iran maintains it has nothing to do with reports that computer worm infiltrated the reactor and says the planned systems have not been effected. north korean state media published the first images of king jong un, the youngest son to kim jong il and the heir-apparent to his job. and north and south korea had the first military working talks in two years.

[ inaudible ] meanwhile, back at home, the obama administration has announced new rules for offshore drilling. interior secretary ken salazar says he will lift the current moratorium when he is comfortable. safety procedures have been upgraded. all of this, of course, is fall-out from the gulf oil spill. the leak has been plugged, correspondent phil keating reports the economic effects linger. >> there is white shrimp caught between the cage. >> 77-year-old frank paddy knows gulf of mexico seafood perhaps better than anyone. the joe patti seafood named after his dad has been around since 1930. for first time ever, exactly where everything is caught is now printed boldly for every customer. >> it concerns me.

maybe i'm overly cautious, i don't know. i know nine out of ten customers are concerned about where it comes from. >> that is the public reception issue that continues to plague what was a $4 billion a year industry across five states. >> the seafood is ready for the rest of the world, the rest of the world needs to know that. >> despite regular reminders from the federal government on down that gulf seafood is safe to eat, much of the nation remains squeamish. >> it's pure supply and demand. if the customers don't want gulf seafood, than the fishermen, wholesalers and the distributors who all want to make money will look elsewhere. the result in florida, the seafood industry is down 20 to 25%. in much worse off louisiana, shrimp alone is down 80%. but at pensacola popular fishouse restaurant attitudes are changing. jim from texas ordered the local mahi mahi. >> it does not taste like

petroleum. the only oil i was con earned about is to live oil. >> the industry will come back. will it do it this year? no. hopefully next year it will. >> if this year of the oil spill, the sales are down 50%. he's not alone. in pensacola, florida, phil keating, fox news. >> chris: don't forget about our text to vote poll. here is tonight's question. what should congress have dealt with before leaving? you can text your answer to 36288. type sr1 for holding ethics hearings. sr2 for spending cuts. sr3 for school nutrition bill. or sr4 for tax cuts. we'll have the results later. grapevine is next. hey, guys, i know i've been bad at this in the past, so i've come up with some mnemonic devices to help me learn your nas. hello, a "penny" saved a "penny" earned. oh, that's 'cause fedex ground helps you save money. that'sht, penny. do you know ours? heavens to betsy. dwayne the bathtub.

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>> chris: now some fresh pickings from the political grapevine. "time" magazine may be more than meets the eye on a story on extreme militia. if you look just below the "m" in "time" it's possible to make out what appears to be the u.s. marine insignia. here, our graphic departments has put the images side-by-side. we asked "time" about the cover. here was its response. "time's cover photo is a member of the ohio defense force, private militia that features heavily in the story in a summer training exercise

in his own uniform. the story is an investigation into the extreme world -- the world of extreme militias and no way about the marine or any of the u.s. armed forces. the marines had this response saying -- "the marine corps has nothing to do with that militia." missouri democratic congressman russ carnahan is defending a stimulus grant that sent $107 million to his brother's company win capital group of st. louis for a wind farm project. republican critics argue the grant was inappropriate because of the family's political connections. media reports say congressman carnahan maintains the attacks particularly for republican challenger ed martin, due to the critic support for oil companies over renewable energy sources. win capital reportedly had a rocky first four years and the wind farm was put on hold until the stimulus bill passed. owner tom carnahan admitted in 2009, "we never really like to say it outloud.

a few months ago the banks were closed. the stimulus changed everything." at least one major democratic donor is funneling his millions elsewhere this election. "new york times" report billionaire george soros who gave more than $20 million to democratic oriented groups in 2004 is holding back so far this year. advisor told the times, "mr. soros believes he can be most effective by funding groups that promote progressive policy outcomes in area such as healthcare, the environment and foreign policy. so he has opted to fund those activities." paper suggests losing big donors like soros contributed to a spending gap between prorepublican and pro-democratic group. if democrats lose control of one or both houses of congress, expect plenty of investigations in the obama administration. correspondent shannon bream reports on one likely subject.

the allegation that the justice department is deciding which laws to enforce on the basis of race. >> it's the reason they dismissed the suit that matters. the reason is a scandal of epic proportion. >> the u.s. civil rights commissioner says his concerns about the department of justice go far beyond the case involving members of new black panther party. accused of voter intimidation in 2008. most of the case was ultimately dropped. a current and also a former d.o.j. attorney both offered sworn testimony that the case exposes a much deeper problem. guidance from top d.o.j. leadership that voting rights laws are meant to protect minorities, not whites and will be enforced accordingly. republican congressman frank wolf says attorney general eric holder has a moral and legal obligation to the american people to "clear up the charges" but that the d.o.j. stonewalled against many attempts to get answers. >> there is a political agenda to not being race neutral at the justice

department. if there is any department, any department that that ought not take place and should take place with no department, but particularly the justice department whose job it is to enforce the law. >> assistant attorney general thomas perez testified before the civil rights commission and denies any wrongdoing. in a letter to the commission dated august 11 he said, "there is no policy of selective enforcement and our actions bear this out." he points to an ongoing case in mississippi where the department has been actively involved in making sure the rights of white voters are being protected. u.s. civil rights commissioner believes that case serves to disprove some of the most damaging allegation against the d.o.j., saying actions speak louder than words. >> it's important that the american people understand that d.o.j. is committed to protecting the rights of all voters, white, black, asian, latino, women, you name it. >> congressman wolf says he has repeatedly urged the white house judiciary commission to launch the

investigation, no matter which party controls the house after the mid-term elections, he will keep on pushing. in washington, shannon bream, fox news. >> chris: here is a piece of legislation almost everyone can agree on. the senate has unanimously passed a bill requiring tv stations and cable companies to keep the volume the same. on regular programming and commercials which you're not going to be surprised to find out are often broadcasts much louder. the house has already approved a similar measure. mcdonald's reportedly may take a bite out of the obama healthcare law. we will talk it over with the panel after a quick break. appraiser: well you rarely see them in this good of shape. appraiser: for example the fingers are perfect. appraiser: the bird is in mint condition. appraiser: and i would say if this were to go to auction today, appraiser: conservatively it would be worth 2 in the bush. woman: really? appraiser: it's just beautiful, thank you so much for bringing it in.

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discussions like that with regulators happen all the time. the crux of the story was whether or not the coverage would be dropped. mcdonald's said it just simply wasn't true. >> you have a piece of legislation that really wasn't well thought out, where you are giving really a blank check to a bump of

regulators to make it up as they go along as the questions pop up. >> chris: what they're talking about is a story in today's "wall street journal" that says mcdonald's has warned regulators that it could, could drop health insurance for 30,000 workers. unless, provision of health insurance reform is changed. let's bring in the panel. stephen hayes from "the weekly standard." a.b. stoddard of the hill. and syndicated columnist charles krauthammer. we have to point out at the start, mcdonald's denies the story and denies it has decided to do anything, but there is, steve, clearly a new requirement in the new healthcare reform law world we're going to be living in that companies are worried about. i would seem to me that the possibility that a company like mcdonald's would have to drop 30,000 workers is damaging. >> mcdonald's was backtracking because it probably didn't expect the memo to go public. the memo, itself, did suggest that mcdonald's might. take language verbatim of the it would be economically prohibitive for our carriers

to continue offering the mini med plans and talk in places that it would deny coverage to 29,500 existing mcdonald's employees. i think the reporting was correct. now whether that means that mcdonald's overstated it to make its case to regulators to try to say you don't want to face a story where 30,000 people are without health insurance, but that is clearly was what was said. this is a problem for the administration because it comes as part of a longer stream of reporting on these things. if you read the front page of the "new york times" and "wall street journal" these days it reads like republican party talking points before healthcare passed. you have seniors who are going to be denied certain benefit. insurance premiums going up. you had the president at his own press conference a couple weeks ago say he never promised that it was going to save money or it wouldn't expensive. he did in fact make that promise. he said it would save money and said we'd cover 30 million more people for free. >> chris: a.b., let's look because they have begun to pile up, some of the

arguments for and against healthcare reform as voters are going to cast at least a parrial verdict on -- partial verdict on it in the november election. put it on the screen. argument on the screen. premiums will likely double in the next decade. 80 million americans won't despite what the ht said be able to keep their current coverage. report won't bend the cost curve down. country will spend $311 billion more on healthcare in the next decade. some of the benefits, parents can keep children up to age 26 with coverage. children with preexisting conditions can't be denied coverage can. eventually more than 30 million uninsured will get coverage. how does it balance out? >> there are very upsetting indicatis that the industry in reaction to the law will pull back, the pharmaceutical companies will not be able to -- they will have to raise prices to make up for large revenue because of the discounts offered to seniors that fall in the doughnut

hole. you have big insurers like coventry and well point, cigna saying they might not offer child only program and only continue covering those under existing coverage. if you look at the expansion of medicare, subsidies that will be provided to try to continue to cover more people. that looks like a long-term entitlement. it doesn't really make us comfortable that the bill is going to save healthcare cost overall. and i think that also experts think that the cost to med -- the cuts in medicare are not really going to be realized. when the voters assess what is happening to their own plans and when they read about what is happening to other people's plans and it might just be exploding entitlement that doesn't save money, they'll be angrier than they are right now. polls are holding steady -- >> chris: bring up a poll. according to the latest fox news dynamic poll out today, 46% now favor not changing,

repealing healthcare reform. 42% oppose repeal. charles, this is not turning out to be a big political winner for democrats. >> it's a loser. i think this case, the mcdonald's case is a perfect example of why it is. this is only one provision in the bill of 2,000 pages. imagine what else, what other land mines are hidden in this. the case i think it's extremely instructive. why would mcdonald's even think about dropping the coverage? the reason is there is a provision in the law that the democrats decided no health insurer can spend more than 15 or 20% of its income on overhead and profit. >> chris: 80% have to go to benefits. >> i'm stating it the other way. so it's got -- >> chris: we're agreeing. >> the point is it cannot spend a lot on overhead. it defines it at 15%. so you have a private company, mcdonald's, in a contract with a private insurer, insuring 30,000

private employees. all of whom seem okay with this. having to undue this as a result of what? an arbitrary number, numbers picked out of a hat. why? 15% and not 19 -- 12 or 18? they are picking it out of the hat because democrats are doing it in the name of fairness and you get a provision that's insane and arbitrarily and inefficient. it contradicts what the president said he can keep your plan. of course you can. but if the employer cancels that plan, then you don't have a plan in the first place. i think it's really indicative of what is in the bill that is only a single item. there are hundreds of these that are going to cause incredible inefficiencies and disruptions. >> chris: unintended consequences. >> some of them are foreseeable and they ignored them. >> chris: log on to our home page at foxnews.com/specialreport and vote for what you want to us talk about tomorrow in the friday lightning round.

you next, negative campaign ads.

he's been in washington for decades. he knows how the game works. he created the game. he's taken millions from special interest. now boehner wants to talk about reforming congress? [ laughter ] now that's funny. >> do me a favor. could you say "senator" instead of "ma'am"? it's just a thing. i worked so hard to get that title. i'd appreciate it. yes, thank you. >> 28 years in washington and barbara boxer works hard for a title? >> chris: well, it's that season again. the final weeks of the campaign, when both sides bring out the knives or as charles krauthammer likes to

say it's the most wonderful time of the year. [ laughter ] >> charles, how long have you been working on that? >> chris: it's interesting because we had as the text to vote issue last night negative advertising by overwhelming margin viewers said it was dirty politics, not fair game. i know you don't like to go up against the viewers but are they being overly sensitive? >> look, there are two kind of negative ads. personal or political, or policy. the policy negative ads are perfectly okay. yes, of course, corners are cut as in the boehner ad. i mean, what member of congress hasn't taken special interest money? it's kind of absurd. but look, advertising is legalized mendacity. when you see an ad in a football game that tells you essentially if you drink the right beer or drive the right car, you are going to get chicks. nobody sues them on the grounds of false advertising. so everybody understands

that. that is the rules of the game. i draw the line personal attacks on family, or personal issues which i think are completely out of bounds. that happens as well. but i think the it's on policy or how they conduct themselveses in office, okay. >> chris: let me go to you on that, a.b. it now turns out that the democrats have been doing research for months now and digging up stuff not on policy, but on business histories, personal history about a lot of g.o.p. opponents and they are running attack ads based on what they found. guys who declared bankruptcy or had messy divorces. one, is that effective? two, is it over the line? >> well, i don't want to use over the line. if you fail to pay your taxes and you're an irresponsebable person, that of note. what is interesting is that congressman in louisiana is running a two-minute ad on senator vitter's prostitution

baggage. he just won his primary by 40 points or something. i don't think anyone in louisiana is listening to it, they haven't for two years. sometimes these are potent but democrats don't have a choice. they're not running on the railroad or defending their accomplishments. this is all they have left. what i think in terms of the season, it's too late. the momentum that republicans have by now, most voters cemented their thinking by the first of october. not a lot of ads will change their mind. there are some voters and independents skeptical of republicans. they voted them out in 2006 and 2008. not happy with democrats. maybe a few of them stay home when they see ads about people refusing to pay taxes or skirting the law. i think it will just help the margins. i don't think it will change the trajectory, though. >> chris: steve, you think negative ads are fine as long as they're accurate? >> look, if you do a negative ad like the one we showed last night with kendrick meek quoting charlie crist

extensively, charlie crist's own words like he was conservative and liked sarah palin speech. things that wouldn't appeal to democrats in florida. it's a great ad. accurate ad. it's fantastic. >> chris: i think everybody would agree that is a fair ad, except for charlie crist. how about when it gets into somebody's business dealings? somebody's personal life? things that are a matter of record. >> i think you have to make some distinctions. i think if anyone attacking a spouse or a kid, that is over the line. on the other hand if somebody has done thing in their business past, that are unseemly or got them in trouble, of course that's fair game. it reflects i think on the character of the person running for office. >> chris: how do you feel about the question a.b. talked about? public has a lot of doubts right now about the obama agenda. how can they counteract them on republicans with the personal or business issues? >> i think they will try. i say as a general rule, there will be exceptions, of

course, this negative advertising won't work for incumbents. people want to throw them out. they can't run on the record. there is an anti-incumbent and largely anti-democratic wave. negative attacks in general won't help them. as much as they might help or make a difference in an open seat where people aren't as familiar with the officials, public figures and could, you know, could have some kind of an impact. >> charles? >> i think there will be one theme, a lot of scatter ed shots, personal attack. theme that democrats have used, which is the republican candidates are extreme. and they're going to say kookie ideas on social security and other items. i don't think it will work. i think it will look desperate. i think the democrats have a hard time running on accomplishments. look at the congress which hasn't passed a budget. not a single appropriation and can't decide what to do on taxes. it has a sorry record. i think it has will resort,

the democrats will resort to attack, attack, attack. i think it will be extremism and i don't think it will work. >> chris: ten seconds, is it a character flaw of mine that a clever, well tuned out negative ad i find very appealing? >> it's a sophisticated sense of cynicism and i would admire that in you. [ laughter ] >> chris: that's it for the panel. stay tuned to see how president obama grades himself on his first two years in office. you'll be surprised. [ commentator ] lindsey vonn! she stays tough!

earlier, she had an all-over achy cold... what's her advantage? it's speedy alka-seltzer! [ male announcer ] alka-seltzer plus rushes relief for all-over achy colds. the official cold medicine of the u.s. ski team. alka-seltzer plus. >> chris: time to reveal the results of tonight's text-to-vote poll and we asked you what should congress have dealt with before leaving, 4% voted for ethics hearings, 9% voted for spending cuts, and 1% voted for a school nutrition bill and 86% voted for tax cuts, thanks for your votes, we have

more than 10,000 of them. finally, tonight president obama was on the campaign trail this week, and he said he's the victim of expectations that are just too high. >> president barack obama:... i've only been here two years, guys. if you look at the checklist, we have covered about 70%... i figured i noeed to have somethig to do for the next couple years. >> 70%! let's check the list, we meet stevie wonder, won a nobel peace prize, got a dog, worked out, all right, objections. >> chris: he's almost there and we levy yave you with the busins picture though day, this is bill sammon welcoming home... excuse me -- his son, billie after his tour with the marines in afghanistan. an